Spotify has announced another quarter of record profits, marking a significant turnaround one year after it increased the prices of its Premium subscription plans for the first time.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in the second quarter, a stark contrast to the loss of 247 million euros ($268 million) reported during the same period last year. The platform also saw a 14% annual increase in monthly active users, reaching 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we are not only offering a fantastic product but also building a strong business,” said CEO Daniel Ek in a statement. “Our growth has outpaced even our expectations, which is promising for the future.”
Following the release of its earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced price increases for its Premium plans in the U.S., effective this month. Individual plan users will see their fees rise by $1 to $12, Duo plan users will pay $2 more at $17, and Family plan users will see a $3 increase to $20. Last July marked the company’s first membership cost increase in 13 years, averaging $1.
Despite the price hikes, Spotify managed to add seven million net subscribers in the quarter, exceeding its guidance by one million.
As the leading audio streaming service globally, Spotify users have been found to be the least likely to cancel their subscriptions compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, the financial landscape for Spotify was not always this optimistic. In 2022, the company’s stock plummeted by over two-thirds due to several quarters of operating losses. In January 2023, Spotify announced a reduction of 600 jobs and, less than a year later, cut an additional 1,500 positions, accounting for about 17% of its workforce.